Anheuser-Busch, TD Bank, Bank of America among high-grade deals; financials firm; Gap rises

By Andrea Heisinger and Cristal Cody

New York, July 7 - Anheuser-Busch InBev Worldwide Inc. and Toronto-Dominion Bank were only a couple of the corporate names in the high-grade market on a packed Thursday.

Anheuser-Busch sold $1.05 billion in two tranches. Each of the notes priced at the tight end of guidance on high investor demand.

The largest sales of the day came from TD Bank and Bank of America Corp., which each priced $2.5 billion in multiple tranches.

TD Bank sold three-year floating-rate notes, three-year fixed-rate notes and five-year notes.

Bank of America priced three-year floaters and five-year notes.

There was an upsized $650 million deal from John Deere Capital Corp. The financing arm of Deere & Co. increased the size from $500 million and sold 10-year notes and reopened an existing floating-rate note due 2013.

New York Life Global Funding priced $650 million of five-year notes under Rule 144A.

In a reversal from other days earlier in the week, there was a lone sovereign deal from the Province of Ontario. The province priced $1 billion of seven-year notes.

The market tone was boosted by a solid jobs report from June, a source said at the end of the day.

"We had people sitting on trades for a while," he said. "They got a go call this morning."

Unemployment claims dropped in the month of June and an economic forecast was better than expected.

There was a "much stronger tone to the market" than in previous days, said a syndicate source who worked on two of the day's trades. "We were feeling very good."

There was a backlog of offerings on the sidelines, and the day's sales from TD Bank and John Deere, among others, were looking for the right tone.

"All of the trades were highly rated," the syndicate source said. "There was a huge wall of cash chasing these names."

Overall trading volume rose about 20% to $15 billion on Thursday.

"Trading was pretty busy," one trader said.

Financial paper traded stronger on Thursday with the new deals from Bank of America and TD Bank.

"Domestic banks are better by 2 to 6 basis points with the exception of Bank of America - it's closing unchanged to 1 basis point better," a trader said. "They announced they were bringing the five-year deal."

Bank of America's new notes traded slightly tighter in the secondary market after pricing. TD's tranches also were tighter.

New York Life Global Funding's notes were flat in trading.

June same-store retail sales data was released on Thursday, pushing up activity in retail bonds on stronger results. Gap Inc.'s notes traded higher after beating estimates.

The Markit CDX Series 15 North American investment-grade index firmed 1 basis point to a spread of 91 bps, according to Markit Group Ltd.

Treasuries sold off on an upbeat private jobs report as the market waits for official government job data on Friday. The benchmark 10-year Treasury note yield rose 3 basis points to 3.14%. The 30-year bond yield added 1 bp ending the day at 4.37%.

TD Bank offers $2.5 billion

Toronto-Dominion Bank sold $2.5 billion of senior medium-term notes (Aaa/AA-) in three parts, a source who worked on the trade said. It was the company's debut deal in the U.S. debt market.

The sale was initially in two parts, and a tranche of floating-rate notes was added.

"The company maxed out at $2.5 billion," the source said. "They had a preference toward the five-year [notes]."

There was a $500 million tranche of three-year floating-rate notes priced at par to yield Libor plus 30 bps.

A $750 million tranche of 1.375% three-year notes priced a spread of Treasuries plus 65 bps. The notes were sold at the tight end of guidance in the 70 bps area, plus or minus 5 bps, a source said.

The final part was $1.25 billion of 2.5% five-year notes priced at Treasuries plus 85 bps. These notes also sold at the tight end of talk in the 90 bps area, plus or minus 5 bps.

The deal as a whole was a blowout with about $9.5 billion total on the books, including $3 billion in the floaters, $2.5 billion in the three-year notes and $4 billion in the five-years.

TD Bank knew it wanted to tap the U.S. debt market for a while, but it wasn't until today that market conditions looked right, the source said.

"It's quite a pristine name, being AAA on one side," she said. "It was subject to a thoughtful process of marketing the deal."

Bookrunners were Goldman Sachs & Co., Citigroup Global Markets Inc., Morgan Stanley & Co., Inc. and TD Securities (USA) LLC.

Proceeds are being used for general corporate purposes.

In secondary trading, the fixed-rate notes due 2014 firmed to 63 bps offered and later to 62 bps bid, 57 bps offered, according to traders.

The tranche of notes due 2016 firmed to 83 bps bid and were seen going out at 82 bps bid.

The bank and financial services company is based in Toronto.

AB InBev's two tranches

Anheuser-Busch InBev Worldwide sold $1.05 billion of notes (Baa1/A-) in two tranches ahead of the market close, a source away from the deal said.

The $300 million of three-year floating-rate notes priced at par to yield Libor plus 36 bps. The notes sold at the low end of guidance in the range of Libor plus 36 to 39 bps.

A $750 million tranche of 1.5% three-year notes sold at a spread of Treasuries plus 70 bps. These notes priced at the tight end of talk in the 70 to 73 bps range.

Bookrunners were Barclays Capital Inc., Bank of America Merrill Lynch and Deutsche Bank Securities Inc. RBS Securities Inc. and Societe Generale assisted on the sale.

Proceeds are being used for general corporate purposes.

The deal is guaranteed by parent company Anheuser-Busch InBev SA/NV and subsidiaries Brandbrew SA, Cobrew NV/SA and Anheuser-Busch Companies Inc.

In secondary trading, the notes due 2014 traded at 65 bps bid, 62 bps offered, according to a trader.

The brewery is based in Leuven, Belgium.

John Deere upsizes

John Deere Capital Corp. sold an upsized $650 million of notes (A2/A) in two tranches late in the day, an informed source said.

The deal size was increased from $500 million total after the tranche of 10-year notes was increased to $500 million from $350 million.

The company reopened an issue of floating-rate notes due in 2013 to add $150 million. The reopened notes priced at 100.0411 to yield Libor plus 15 bps.

Total issuance is $500 million, including $350 million sold on June 2 at par.

The second part was an upsized $500 million of 3.9% 10-year notes priced at a spread of Treasuries plus 77 bps.

The notes were sold at the tight end of talk in the 80 bps area.

Bookrunners were Bank of America Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc.

Proceeds are being used for general corporate purposes.

The financing arm of heavy equipment maker Deere & Co. is based in Reno, Nev.

BofA prices $2.5 billion

Bank of America sold $2.5 billion of notes (A2/A/A-) in two tranches late in the day, a market source said.

A $500 million tranche of three-year floating-rate notes priced at par to yield Libor plus 155 bps.

The second tranche was $2 billion of 3.75% five-year notes priced at a spread of Treasuries plus 205 bps.

Bank of America Merrill Lynch ran the books.

Bank of America's notes due 2016 firmed to 199 bps bid, 196 bps offered in the secondary market, one trader said. Going out, the notes also were seen at 200 bps bid, 195 bps offered.

The bank and financial services company is based in Charlotte, N.C.

NY Life's five-year

NY Life Global Funding sold $650 million of 2.45% five-year notes (Aaa/AAA) to yield Treasuries plus 75 bps under Rule 144A, according to a market source.

Bookrunners were Barclays Capital Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC.

The notes traded in the gray market at 71 bps offered, a trader said.

Another trader saw the notes unchanged in the secondary market at 75 bps bid.

The funding arm of insurance company New York Life is based in New York City.

Ontario trades $1 billion

The Province of Ontario priced $1 billion of 3% seven-year bonds (Aa1/AA-) to yield 53.8 bps over Treasuries, or mid-swaps plus 33 bps, according to an FWP filing with the Securities and Exchange Commission.

Bookrunners were CIBC World Markets, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and UBS Securities LLC

Proceeds are being used for general provincial purposes.

The issuer is based in Toronto.

Gap rises

Gap's June same-store sales were expected to drop 2.4% and instead rose 1% in data reported on Thursday.

The retailer's 5.95% notes due 2021 closed out at 97.25, 97.50 on Thursday, higher than the 96.75, 96.875 quoted the previous day, a trader said. The notes (Baa3/BB+/BBB-) priced at 99.65 on April 7.

The clothing retailer is based in San Francisco.

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